fbpx
Stories

Pandemic brought into light a new industry that we often overlooked

The time is changing. Nobody had thought favourably of the private security sector, whether consumers or staff. It was still a low-value career. While one of the largest creators of jobs, the government still underestimated the industry. For example, there are 15 lakh police and 50 lakh guards in India. However, circumstances began to change. As Covid-19 hit it, the government listed it as an important utility, giving it the freedom to travel about unrestrictedly. In addition to introducing a 22,810-crore Atmanirbhar Bharat Rozgar Yojana, the government has announced a package for labour-intensive industries aimed at the 5growth and development of these industries. Now the industry asks the government to designate guards as frontlines to prioritize the vaccine.

When large sections of the workforce emigrated from towns to smaller settlements, social security personnel kept watching. A player in the industry said many cash van drivers who quit their jobs to drive Ola and Uber are back for jobs. Why does that happen? Since now people like to ride in their own vehicles, taxi drivers don’t make much money even though they work 14 to 15 hours a day.

On the other hand, the labor force follows three universal conditions of workers: minimum wage, employment security and social justice (through employee health scheme, provident fund and gratuity). Instead of a few extra dollars, they like social security and prosperity. Social defence – organized and unorganized segments – covers the whole industry. Companies also cut prices across the board from mobile providers to leases. According to SIS Sinha, the pandemic has made the industry known. Thus, security jobs satisfy the employee’s needs for minimum wage, workplace protections and coverage of social security (through the healthcare system for employers and health funds for workers).

What’s next? Analysts argue that an increase in security companies would not exclude the fact that the market has a secular potential. Both segments (private protection and facilities management) are highly fragmented and market formalization can be accomplished through organic and inorganic routes. Two developments are expected in future: formalization of the industry and expansion through mergers and acquisitions. At the moment, 35 per cent of the security market is held by organized players. By 2024, that will increase to 40%. Their proportion of facilities administration is 25% lower but in the next three years could rise to 30%. Regulations comply for organized players. The little players bleed. It is a large game, and the survival of marginal players is at stake at low margins. Consolidation and formalization will lead to greater growth.

Technology development in the Security Industry

Experts believe the future of private security and facility management is being defined in technology. Security companies even before Covid started to invest in Tech but the demand has spread over the last few months from their end customers. For example, the Tenon Group has Soteria, a three-year-old tech arm that can track companies around the world remotely using data analytics and artificial intelligence (AI). In Gurgaon and Singapore, there are two centres of order. Over the last six months, this company has expanded by over 100 per cent. The client has changed his mind.

For example, at Mumbai Nirlon Knowledge Park one of its technological solutions has been built. Until March, this cluster did not use technology and physical monitoring. Tenon used cameras, movement sensors and a special program to monitor body temperature as a human enters a house. The system can block the person’s access card when it’s above average. On that campus, nearly 20,000 people served. About twelve thousand are already working today. If there are two people within two metres, their cameras transmit vibrational warnings.

The industry follows the economies of scale principle. In other words, when size increases, expenses begin to fall. Moreover, it requires gathering an enormous amount of data which is going to bring in immense riches. SIS has released Virtual Covid Marshall, a subscribing app that uses current CCTVs in offices to monitor the body temperature and ensures enforcement with vehicle disinfection.

Following the lockdown, the industry has discovered new market streams with many customers regularly reaching out to the firms for sanitizing them and their neighbourhood.

So, what’s next?

The private security and facilities management sector of the Indian economy has seen recent growth after suffering for a few months after the pandemic. For example, according to Freedonia, the private security industry is expected to expand at nearly 15% CAGR (compound annual growth rate) to reach 1.6 lakh crore by 2024, more than doubling from 80,000 crores in 2019. During this time, the facility management industry is projected to expand from 1.1 lakh crore to 2.3 lakh crore.

According to experts, the private security sector was affected by the pandemic for the first two quarters. From the third quarter onwards, the growth rate increased. After March 2021, it’s likely to totally recover. The effect differs depending on the player. Companies with significant exposure to the IT/ITeS sector, educational schools, restaurants, malls, and other businesses in the organised market have all been impacted. Manufacturing, hospitals, and finance have been mostly untouched by the crisis. According to Snigdha Sharma, Senior VP (Investment Banking) at DAM Capital Advisors, security services were affected less and were running close to full range. The defence sector, according to SIS Group’s Managing Director Rituraj Sinha, has a poor association with GDP. According to him, as the economy rises at 5%, private security grows at 15%. Since demand for guards and cleaners rises as new things are constructed (highways, hotels, car dealerships, etc.). However, even though the economy shrinks by 5%, we nevertheless expand at a rate of 3% to 5%. It’s a one-of-a-kind thing that doesn’t appeal to many companies. It’s only true in e-commerce: consumers purchase goods online because they have more resources in a good economy. However, demand for e-commerce hasn’t decreased in recent lockdowns. Thus, on the upside, we have a multiplier impact, and on the downside, we have a defence.

 

See also  We were the masterminds, says AAP leaders on the controversial posters swiveling in Delhi; Criticizing Narendra Modi's Covid Crisis handling.

Related Articles

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker